The creator economy has been the subject of many discussions in recent years, and the reason is plausible. Various statistics show that the economy is booming, with a market size of around $250 billion in 2023. The question many then ask is, what can I make of the fast-growing economy?
You can make much of it, especially if you own a brand. Online content creators are fast becoming the preferred option for brands looking to reach their target audience. As more brands gravitate towards this industry, conversations keep bubbling on how the creator economy has grown over the years and its potential for the future. This is one of such discussions, so let’s dive in!
Table of Contents
- How the Creator Economy Market Size Has Grown Over the Years
- Why the Creator Economy is Growing Rapidly
- Future Trends and Projected Growth
- Best Monetization Channels for Creators
- What Are the Sources of Income for Content Creators?
- Frequently Asked Questions
- Final Thoughts
How the Creator Economy Market Size Has Grown Over the Years
One notable fact about the creator economy is its exponential growth. The creator economy has existed since the early 2000s, when blogging started gaining ground, and it has been active since the late 2000s when YouTube was launched. What followed was the launch of several social media platforms like Facebook, Instagram, and TikTok, which increased the number of people creating content for those platforms.
Despite the steep rise of most of these social media platforms, very few people could have predicted their impact on the creator economy. According to Goldman Sachs, the sector went from having a market size of about $104 billion in 2022 to a staggering $250 billion in 2023. That number is expected to keep growing as independent creators rise to leverage the opportunities in the influencer marketing factory.
Why the Creator Economy is Growing Rapidly
After realizing the creator economy’s growth trajectory, the question of why it is growing so fast becomes easy to answer. The economy is feeding off many boosters, such as the increase in the number of people and brands investing in the sector.
Creator economy startups are having a busy time engineering tools to serve the creators. Many monetization tools help content creators make a living off their craft. Some are to help increase the financial value of the industry, which is still growing beyond limits.
Reduced Entry Barriers
Some experts have related the rapid growth of the creator economy to the fact that barriers to becoming a creator have reduced significantly in recent years. Content creators can now leverage social media to build a following of loyal audiences interested in their content and trust their influence. All they have to do is pair a phone with good camera quality with additional lighting and audio, and they are ready to start creating content.
More People Spend More Time Online
Undeniably, the creator economy got a significant boost during the COVID-19 pandemic. This shift is a result of the lockdown policies across the world, which left many people idling in their homes with little to do.
Most took to social media to relieve boredom, but some thought better. Instead of consuming, they started creating. The result was a sharp increase in the number of creators and people using community-based platforms to connect to like-minded individuals.
Increased Impact of Creator Economy Startups
Finally, there is the role creator economy startups play. Startups like Patreon, Stripe, and Cameo allow content creators to monetize their craft and form a deeper connection with their audience. They also ease the entry of independent creators, who cannot compete with the more established ones for the monetary opportunities in the economy.
Future Trends and Projected Growth
Now that the growth and status of the creator economy cannot be denied, one thing brands and interested individuals should consider is the potential the sector holds. Consider what the creator economy could offer you and your brand if you are a brand owner. Some brands leverage influencer marketing to secure long-term partnerships with independent creators, while others take other digital marketing routes.
More Brands Leveraging the Creator Economy to Reach Target Audience
With the creator economy market size expected to reach half a trillion dollars by 2027, one can only guess how much more dynamic the economy will get in the coming years. Video content on platforms like TikTok, Instagram, and YouTube continue to garner greater attention than traditional ads, mainly as more people use ad-blockers while surfing the internet. Brands must lean into the audience these Instagram, TikTok, and YouTube creators possess to market their products.
Content Creators Establishing Personal Brands
Another trend in the economy is content creators establishing their brands. YouTube creators like MrBeast and Logan Paul are examples of the minority making a career out of content creation, but this trend is expected to rise. The financial value of the minority of content creators is more than that of the majority combined, showing how cut-throat the creator economy could be.
The solution for most creators is to find ways to make a living off their crafts online. For many creators, this solution is to build a unique brand of their own. The creator economy database reveals how hard it is for a content creator to achieve financial success in the market. More money can be accrued to the economy as more creators branch out to explore other opportunities.
Best Monetization Channels for Creators
Data from Linktree show that only a few creators can live off their earnings from content creation. The study shows that 12% of full-time content creators earn up to $50 thousand yearly, while 46% earn less than $1 thousand. 3% of part-time content creators can make a living off their influence, reaching above $50 thousand a year. 68% earn less than $1 thousand annually from creating content online.
The numbers above show the immense need for creators to know how to monetize their crafts. Some of the best subscription platforms for content creators to monetize their skills include Patreon, which allows creators to create exclusive content for their subscribers, who pay a fee to access their content. There is also OnlyFans, which paid $4.5 billion to content creators in 2022.
Social media platforms like YouTube, TikTok, Twitter, Instagram, and Facebook also create channels for creators to receive monetary rewards from their audience. These monetization channels make it easy for creators to be dedicated to their crafts and focus on creating content that appeals to their audience.
What Are the Sources of Income for Content Creators?
Despite the creator economy increasing, only a tiny fraction of creators can monetize their platforms profitably. Some of the ways they get revenue include:
Most content creators primarily get their income from brand deals. Brands are shifting to the influencer marketing factory, as it is proving to be a more effective way to market their products than traditional advertising. Creators earn by marketing these products to their audience and influencing them to buy them.
Affiliate Marketing and Partnerships
Content creators use affiliate marketing and partnerships to make income off their craft. About 25% of content creators earn revenue from affiliate marketing, where they get paid commissions for every person who buys a product through them. In addition, creators are now selling merchandise, allowing their superfans to support them directly while building a stronger attachment to them.
Finally, some creators leverage their massive online following to create personal brands. They make and sell online and/or physical products directly to their fans, allowing them to enjoy the dividends of being an entrepreneur with a ready market. After Logan Paul and KSI energy drink Prime earned a reported $250 million in revenue in 2022, it became the first creator-led brand to have a Superbowl commercial. That was not surprising from one of the biggest YouTube creators.
An online product example is courses. Most people have seen their favorite influencers/creators pitch their courses on social platforms. Courses are a core income driver for some content creators. Their courses are built on course platforms accessible to anyone – meaning the content creator formula for creating courses is accessible to everyone in 2024.
Frequently Asked Questions
While about a quarter of the global population is projected to have access to the internet, with an estimated 303 million being in the creator economy, many have questions about what this sector is all about. In this section, we will answer some common questions people ask about the creator economy and creators.
Is the Creator Economy Saturated?
The simple answer to this is yes. The creator economy is saturated, but more people still get into it and make it big. The most essential tool for content creators looking to set themselves apart is to find a niche and establish themselves there. When you provide valuable or appealing information through your content, you stand a higher chance of building a loyal following from people who are interested in that area.
Brands also prefer to work with creators with a loyal audience in the area they are trying to reach (specialization). This is why brand deals are one of the significant sources of income for many creators across different platforms.
What is the Creator Economy Audience?
The creator economy’s size is often subject to differing opinions primarily due to the difficulty in calculating the number of people involved in the sector. Some statistics focus on only the content creators. In contrast, others consider other economic players, such as the audience, brands, creator economy startups, and advertising companies that help the economy thrive.
So, when you take the broader perspective, the creator economy audience is primarily the brands that work with the content creators and everyday people who rely on this influencer marketing for product approval. The two categories of audience are essential for a creator looking to make a living off content creation. The brands bring the money the creator needs to live, and the followers carry the brands knocking.
The content creator market size is immense and expected to grow as more people and brands gravitate towards it. The continuous increase in social media users and the amount of time they spend on these platforms mean that influencers in these spaces will remain a primary way to reach these people. Brands have no choice but to lean into influencer marketing as the creator economy continues providing access to a broader market.